Textile News, Apparel News, RMG News, Fashion Trends
Editorial

Bangladesh textile and apparel manufacturing industry will continue to grow rapidly

When we see clearly that the Chinese government is closing a number of factories and we also see that the US is imposing bulk of tariffs on Chinese manufactured goods, it is understood that these manufacturing facilities will be relocated soon or after.

Tareq Amin

Currently, Bangladesh is the second largest apparel exporter in the world. The country is producing apparel items for most of the globally renowned fast fashion brands in the world. A number of high street brands have flocked into the country already. Mid to top end brands those who have not yet sourced directly from Bangladesh are also entering the country day by day. Altogether the role and importance of Bangladesh apparel manufacturing industry for the global fashion industry is growing very fast.

Bangladesh textile and apparel manufacturing industry will continue to grow rapidly

Time to time we have covered stories on many macroeconomic factors which have a major impact on global business value chains particularly the textile and apparel. However capability in terms of resource availability and skills has been the key factor in the shift of the industry. Particularly when the opportunities were there, only those countries could attract the business who could build the capabilities. The textile and apparel manufacturing bases have been heavily subsidized and supported by the governments mainly to support huge quick employment generation scopes. China while having to facilitate manufacturers with a number of benefits and subsidies to host almost all manufacturing base for the world eventually became very cheap place to manufacture textiles and apparel.

Very quickly, China is seeing a reality of severe environmental impact of the industries and so now in such a position that they have nothing to do but restrict manufacturing factories particularly which are putting an adverse effect on the environment. On the other hand, due to the change in American policy to ‘see the world’ is putting another big impact. In the latest Donald Trump speech given in the UN General Assembly, the country emphasized to become more protectionists and reducing globalization particularly for trades related to manufactured products. There was a clear policy so far in the western world that they will outsource as much as possible of manufactured goods and provide as much as possible services to the world. But currently we are seeing a major change in this and so it is obvious that a major change in the global manufacturing value chain will occur and as always the textile industry will follow the same trend.

Bangladesh textile and apparel manufacturing industry will continue to grow rapidly
Figure 1: Bangladesh RMG industry is using innovation in designing their products.

So, the textile manufacturing will no longer be so centered in one country or in one region. It is going to scatter into capable countries and regions. When we see clearly that the Chinese government is closing a number of factories and we also see that the US is imposing bulk of tariffs on Chinese manufactured goods, we understand that these manufacturing facilities will be relocated soon or after.

And that’s where we see the enormous growth potential for Bangladesh. Bangladesh is well capable to fill up the supply gaps which are to emerge due to the supply interruptions from China particularly for apparel. If not for the long run, at least for short to medium run Bangladesh’s apparel export will continue to grow rapidly. And naturally, to cater that growth, backward linkage industry will also see enormous growth. So, Bangladesh textile industry is clearly going to put more and more impact on the global textile and apparel supply chain.

Bangladesh still can capitalize on the available resources like water and human resources. Currently, though the cost is increasing, the supply of gas and electricity has stabilized. If the manufacturers can manage the cost and can remain somewhat profitable the sector is going to boom further.

And that’s where we see the enormous growth potential for Bangladesh. Bangladesh is well capable to fill up the supply gaps which are to emerge due to the supply interruptions from China particularly for apparel. If not for long run, at least for short to medium run Bangladesh’s apparel export will continue to grow rapidly. And naturally to cater that growth, backward linkage industry will also see enormous growth. So, Bangladesh textile industry is clearly going to put more and more impact on the global textile and apparel supply chain.

The government eventually has been facilitating the factory owners by reducing corporate tax, devaluing local currency taka and keeping the minimum wage as low as about 100 $ per month. The government is also establishing a number of economic zones providing lands and facilities to the manufacturing companies at much cheaper rates. Despite a number of odds, the financial sector is still providing the bulk of finances to the textile and apparel manufacturing companies.

With all important factors happening around, Bangladesh will continue to be the dream place to source fast fashion garments for top EU and US companies. However, as most of the Bangladesh factories are running with very low or no profitability such growth may not sustain. Even the whole industry may become vulnerable if those top brands don’t become more responsible. They must not slaughter the duck to take out all golden eggs at one shot. They need to take care of this. The global brands have to give a fair, ethical and right price to the manufacturers as if they can comply with the social and environmental requirements rightly and still can remain competitive and can pay better to the people working inside and living around the factories.

Latest Publications

View All

Textile Today April 2020 Issue
3 Special Supplementary
Editorial on "How to improve immune system of industry to fight the pandemic"
Cover Story on 'Rightsizing of textile and apparel industry'
Exclusive Interview- Mohammad Hatem, 1st VP of BKMEA
06 - Industry Experts Opinion
05 - Factory news
44 - Total Articles
100 - Total Pages
Download Now